Category: Savings

There are so many reasons why you need to save money. It can be useful for your future, as it also teaches you on how to manage your spendings. If you think that it’s hard to save money, you’re right. It takes an absolute determination to keep that piggy bank full, and not breaking it when it’s not time. Fret not, for here are s few useful tips on how to save money.

Record and Budget

Recording your income and expenditures might sound very complicated, something that accountants would do on those huge money ledgers. You also probably think you’d have to master mathematical skills to do this. However, there are plenty of mobile applications that can help you record where your money goes. The application will do all the mathematics for you, so at the end of the day, you’ll know whether you’re spending more than you should.

After you have successfully recorded your money flow, you can automatically set up a budget in your head. If you’re spending too much, look at which expenditures you can cut down on. Maybe you can substitute that $20 manicure at the salon by getting a $10 do-it-yourself manicure kit instead.

Set Goals

Saving money, as we mentioned before, requires determination. And no commitment or motivation can come through without the right goals. Having an intent on why you should be saving money will drive you into the discipline, and once you’ve reached that goal, you’d be addicted to saving more money for an even bigger target.

For example, you’ve decided to go on a trip to a nearby tropical island. The price of the plane ticket is $120. So, you can save $30 per month, and in 4 months, you’ll be able to buy the ticket and go on your trip. Next, you’ll set a more challenging target, maybe a trip abroad this time.

Rethink Before Purchasing

We often go to the shopping area and get lured into shops, caressing the beautiful clothing and trying out fancy new gadgets. Before we know it, we look at the price tag and our mind goes “not bad!”. And without thinking twice, we’re at the cashier, ready to spend money on something we don’t really need. And by the end of the month, we wonder where all our money went.

This is a common scenario among those who aren’t used to saving money. The trick is to ask yourself “do I really need this?”every time you are tempted into buying something. And even when you have the answer, ask again. Really think about whether or not what you’re buying will be useful, in the long term. Must you really buy a new nail polish when the ones at home are rusting in the corner? Exactly.

Saving money is one of the best financial moves that you can make. For every earning that you get, you should always ensure that you set aside a certain percentage as part of your savings. In current times, the use of credit cards has become so popular that a majority of people fail to see the importance of savings. For the credit cards, you simply spend the money that you require and repay it later. As much as it is convenient, it does not offer as many benefits as having savings in your account. Below are some of the top reasons as to why you should save money.

Main reasons for saving money

Financial independence

Having financial independence means having enough money to cater for your financial needs. Saving is one of the best ways that can help you achieve that. The little that you put into your savings account from all your earnings will become a significant amount eventually, allowing you to handle any financial need such as going for a holiday, helping family members, investing in someone’s start-up, or even starting your own business. You will not have to rely on loans from financial institutions, which come with high interest rates and other fees or charges.

Handle emergencies

There is no way of telling what will happen in the future. Being prepared for any situation is the best precaution you can take. Financially, you might find yourself in trouble at any time due to unforeseen situations. Without any savings, you will undergo many struggles and solve your financial problem will be an uphill challenge. On the other hand, having a good amount of money in your savings account will enable you to handle any financial emergency that may arise, with ease. In addition to that, you will be able to access money from your savings account faster than from any other source.

To gain interest

Many financial institutions offer some good interests on any savings made. The amount of interest gained will depend on the type of account that you choose, as well as the banking institution you use. You can do some research to determine the best account and institution that will offer you the most based on the amount and frequency of deposit of your savings. For most financial institutions, the longer you keep your money in the savings account, the more interest you will earn.